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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 0-13546
 APACHE OFFSHORE INVESTMENT PARTNERSHIP
 Delaware
    
    41-1464066(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400
 (713) 296-6000
 Securities registered pursuant to Section 12(b) of the Act: None
 Securities registered pursuant to Section 12(g) of the Act: Partnership Units
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o(Do not check if smaller reporting company)
    
    Smaller reporting company þ
 o þ
  2010
    

    $15,620,308
 DOCUMENTS INCORPORATED BY REFERENCE:




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TABLE OF CONTENTS
 DESCRIPTION
 Item
    
    PagePART I1. BUSINESS
    
    
    11A. RISK FACTORS
    
    
    31B. UNRESOLVED STAFF COMMENTS
    
    
    82. PROPERTIES
    
    
    83. LEGAL PROCEEDINGS
    
    
    11PART II5. MARKET FOR THE PARTNERSHIPS SECURITIES AND RELATED SECURITY HOLDER MATTERS
    
    
    126. SELECTED FINANCIAL DATA
    
    
    127. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    137A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    208. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    239. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    419A. CONTROLS AND PROCEDURES
    
    
    419B. OTHER INFORMATION
    
    
    41PART III10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
    
    
    4211. EXECUTIVE COMPENSATION
    
    
    4212. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    
    
    4213. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    4214. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    42PART IV15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
    
    
    43EX-23.1EX-31.1EX-31.2EX-32.1EX-99.1




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PART I
 
 ITEM 1. BUSINESS
 General
       1




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2010 Results and Business Development
      2




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Marketing
    
 ITEM 1A. RISK FACTORS
  Future economic conditions in the U.S. and key international markets may materially adversely
impact the Partnerships operating results.
  Crude oil and natural gas prices are volatile and a substantial reduction in these prices could
adversely affect our results.
  
    
    worldwide and domestic supplies of crude oil and natural gas;
    
    actions taken by foreign oil and gas producing nations;
    
    political conditions and events (including instability or armed conflict) in
crude oil or natural gas producing regions;
    
    the level of global crude oil and natural gas inventories;
    
    the price and level of imported foreign crude oil and natural gas;
 3




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
    
    the price and availability of alternative fuels, including coal and biofuels;
    
    the availability of pipeline capacity and infrastructure;
    
    the availability of crude oil transportation and refining capacity;
    
    weather conditions;
    
    electricity generation;
    
    domestic and foreign governmental regulations and taxes; and
    
    the overall economic environment.
  
    
    limiting our financial condition, liquidity, and/or ability to fund planned capital expenditures and operations;
    
    reducing the amount of crude oil and natural gas that we can produce economically;
    
    causing us to delay or postpone some of our capital projects;
    
    reducing our revenues, operating income and cash flows;
    
    a reduction in the carrying value of our crude oil and natural gas properties; or
 Our ability to sell natural gas or oil and/or receive market prices for our natural gas or oil may
be adversely affected by pipeline and gathering system capacity constraints and various
transportation interruptions.
  The shut-in of production from our South Timbalier 295 field could have a material adverse effect
on our business, financial condition or results of operation s .
  Weather and climate change may have a significant adverse impact on our revenues and productivity.
  4




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Declining commodity prices may require the Partnership to reduce capital expenditures or
distributions to partners, or both, as cash from operating activities decline.
  We are exposed to counterparty credit risk as a result of our receivables.
  The Partnership may not realize an adequate return on its drilling activities.
  
    
    unexpected drilling conditions;
    
    pressure or irregularities in formations;
    
    equipment failures or accidents;
    
    fires, explosions, blow-outs and surface cratering;
    
    marine risks such as capsizing, collisions and hurricanes;
    
    other adverse weather conditions; and
    
    increase in cost of, or shortages or delays in the delivery of equipment.
  Crude oil and natural gas reserves are estimates, and actual recoveries may vary significantly.
  
    
    historical production from the area compared with production from other areas;
    
    the assumed effects of regulations by governmental agencies, including the
impact of the SECs new oil and gas company reserves reporting requirements;
    
    assumptions concerning future crude oil and natural gas prices;
    
    future operating costs;
 5




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
    
    development costs; and
    
    workover and remediation costs.
  The Partnership may incur significant costs related to environmental matters.
  Our operations are subject to governmental risks that may impact our operations.
  Proposed regulations related to emissions and the impact of any changes in climate could adversely
impact our business.
     Proposed federal regulation regarding hydraulic fracturing could increase our operating and capital
costs.
  6




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Oil and gas operations involve a high degree of operational risk, particularly risk of personal
injury, damage or loss of equipment and environmental accidents.
  
    
    drilling well blowouts, explosions and cratering;
    
    pipeline ruptures and spills;
    
    fires;
    
    formations with abnormal pressures;
    
    equipment malfunctions; and
    
    hurricanes which could affect our operations in the Gulf of Mexico, as well as other natural disasters.
  Any additional drilling laws and regulations, delays in the processing and approval of permits and
other related developments in the Gulf of Mexico resulting from the Deepwater Horizon incident
could adversely affect the Partnerships business.
    7




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We have limited control over the activities on properties we do not operate.
  The Partnership faces significant industry competition.
  Insurance policies do not cover all risks.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
 Acreage
  Developed AcreageLease Block
    
    State
    
    
    Gross Acres
    
    
    Net AcresShip Shoal 258, 259
    
    LA
    
    
    10,141
    
    
    
    638South Timbalier 276, 295, 296
    
    LA
    
    
    15,000
    
    
    
    1,063North Padre Island 969, 976
    
    TX
    
    
    10,080
    
    
    
    714Matagorda Island 681, 682
    
    TX
    
    
    10,840
    
    
    
    68146,061
    
    
    
    3,096
  8




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Productive Oil and Gas Wells
  Gas
    
    
    OilLease Block
    
    State
    
    
    Gross
    
    
    Net
    
    
    Gross
    
    
    NetShip Shoal 258, 259
    
    LA
    
    
    6
    
    
    
    .38
    
    
    
    
    
    
    
    South Timbalier 276, 295, 296
    
    LA
    
    
    1
    
    
    
    .07
    
    
    
    18
    
    
    
    1.27North Padre Island 969, 976
    
    TX
    
    
    6
    
    
    
    .43
    
    
    
    
    
    
    
    Matagorda Island 681, 682
    
    TX
    
    
    4
    
    
    
    .25
    
    
    
    
    
    
    
    17
    
    
    
    1.13
    
    
    
    18
    
    
    
    1.27
 Net Wells Drilled
  Net Exploratory
    
    
    Net DevelopmentYear
    
    Productive
    
    
    Dry
    
    
    Total
    
    
    Productive
    
    
    Dry
    
    
    Total2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    .07
    
    
    
    
    
    
    
    .072009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    .07
    
    
    
    .07
 Production and Pricing Data
  Production
    
    
    Average Lease
    
    
    Average Sales PriceOil
    
    
    NGLs
    
    
    Gas
    
    
    Operating
    
    
    Oil
    
    
    NGLs
    
    
    GasYear Ended December 31,
    
    (Mbbls)
    
    
    (Mbbls)
    
    
    (MMcf)
    
    
    Cost per Mcfe
    
    
    (Per bbl)
    
    
    (Per bbl)
    
    
    (Per Mcf)2010South Timbalier 295
    
    
    16
    
    
    
    1
    
    
    
    28
    
    
    $
    3.01
    
    
    $
    76.62
    
    
    $
    51.21
    
    
    $
    5.29Other fields
    
    
    1
    
    
    
    2
    
    
    
    573
    
    
    
    1.66
    
    
    
    78.65
    
    
    
    49.49
    
    
    
    4.65Total
    
    
    17
    
    
    
    3
    
    
    
    601
    
    
    $
    1.90
    
    
    $
    76.78
    
    
    $
    50.21
    
    
    $
    4.682009South Timbalier 295
    
    
    34
    
    
    
    4
    
    
    
    61
    
    
    $
    1.57
    
    
    $
    57.25
    
    
    $
    31.90
    
    
    $
    4.04Other fields
    
    
    2
    
    
    
    2
    
    
    
    470
    
    
    
    2.19
    
    
    
    64.36
    
    
    
    32.35
    
    
    
    3.87Total
    
    
    36
    
    
    
    6
    
    
    
    531
    
    
    $
    1.96
    
    
    $
    57.60
    
    
    $
    32.07
    
    
    $
    3.892008South Timbalier 295
    
    
    29
    
    
    
    3
    
    
    
    54
    
    
    $
    1.69
    
    
    $
    110.58
    
    
    $
    59.85
    
    
    $
    9.24Other fields
    
    
    2
    
    
    
    3
    
    
    
    414
    
    
    
    1.83
    
    
    
    111.25
    
    
    
    60.94
    
    
    
    8.89Total
    
    
    31
    
    
    
    6
    
    
    
    468
    
    
    $
    1.78
    
    
    $
    110.61
    
    
    $
    60.32
    
    
    $
    8.93
  Estimated Proved Reserves and Future Net Cash Flows
  9




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Oil
    
    
    NGL
    
    
    Gas(Mbbls)
    
    
    (Mbbls)
    
    
    (MMcf)Proved developed
    
    
    487
    
    
    
    74
    
    
    
    2,249Proved undeveloped
    
    
    
    
    
    
    
    
    
    
    105Total proved
    
    
    487
    
    
    
    74
    
    
    
    2,354
    10




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ITEM 3. LEGAL PROCEEDINGS
  11




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PART II
 
 ITEM 5. MARKET FOR THE PARTNERSHIPS SECURITIES AND RELATED SECURITY HOLDER MATTERS
    
 ITEM 6. SELECTED FINANCIAL DATA
  As of or For the Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In thousands, except per Unit amounts)Total assets
    
    $
    10,992
    
    
    $
    8,236
    
    
    $
    6,680
    
    
    $
    8,308
    
    
    $
    8,629Partners capital
    
    $
    7,483
    
    
    $
    6,086
    
    
    $
    5,191
    
    
    $
    6,960
    
    
    $
    7,625Oil and gas sales
    
    $
    4,270
    
    
    $
    4,311
    
    
    $
    7,928
    
    
    $
    7,679
    
    
    $
    10,255Net income
    
    $
    1,555
    
    
    $
    1,332
    
    
    $
    5,335
    
    
    $
    4,834
    
    
    $
    7,149Net income allocated to:Managing Partner
    
    $
    467
    
    
    $
    447
    
    
    $
    1,229
    
    
    $
    1,146
    
    
    $
    1,702Investing Partners
    
    
    1,088
    
    
    
    885
    
    
    
    4,106
    
    
    
    3,688
    
    
    
    5,447$
    1,555
    
    
    $
    1,332
    
    
    $
    5,335
    
    
    $
    4,834
    
    
    $
    7,149Net income per Investing
Partner Unit
    
    $
    1,065
    
    
    $
    867
    
    
    $
    3,976
    
    
    $
    3,531
    
    
    $
    5,178Cash distributions per
Investing Partner Unit
    
    $
    
    
    
    $
    
    
    
    $
    5,500
    
    
    $
    4,000
    
    
    $
    7,500
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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
        Results of Operations
  13




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Net Income and Revenue
      For the Year Ended December 31,Increase
    
    
    
    
    
    
    Increase2010
    
    
    (Decrease)
    
    
    2009
    
    
    (Decrease)
    
    
    2008Gas volumes  Mcf per day
    
    
    1,647
    
    
    
    +13
    %
    
    
    1,455
    
    
    
    +14
    %
    
    
    1,277Average gas price  per Mcf
    
    $
    4.68
    
    
    
    +20
    %
    
    $
    3.89
    
    
    
    -56
    %
    
    $
    8.93Oil volumes  barrels per day
    
    
    47
    
    
    
    -52
    %
    
    
    98
    
    
    
    +17
    %
    
    
    84Average oil price  per barrel
    
    $
    76.78
    
    
    
    +33
    %
    
    $
    57.60
    
    
    
    -48
    %
    
    $
    110.61NGL volumes  barrels per day
    
    
    8
    
    
    
    -50
    %
    
    
    16
    
    
    
    n/a
    %
    
    
    16Average NGL price  per barrel
    
    $
    50.21
    
    
    
    +57
    %
    
    $
    32.07
    
    
    
    -47
    %
    
    $
    60.32
 Natural Gas Sales
 2010 vs. 2009
 2009 vs. 2008
 14




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Crude Oil Sales
 2010 vs. 2009
 2009 vs. 2008
 NGL Sales
  Operating Expenses
 2010 vs. 2009
 2009 vs. 2008
  15




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Capital Resources and Liquidity
        Capital Commitments
  16




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Off-Balance Sheet Arrangements
  17




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Insurance
    Critical Accounting Policies and Estimates
  Reserve Estimates
 .
    18




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Asset Retirement Obligation (ARO)
    19




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Risk
    Forward-Looking Statements and Risk
  
    
    the market prices of oil, natural gas, NGLs and other products or services;
    
    the supply and demand for oil, natural gas, NGLs and other products or services;
    
    production and reserve levels;
    
    drilling risks;
    
    economic and competitive conditions;
    
    the availability of capital resources;
 20




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
    
    capital expenditure and other contractual obligations;
    
    weather conditions;
    
    inflation rates;
    
    the availability of goods and services;
    
    legislative or regulatory changes;
    
    terrorism;
    
    the capital markets and related risks such as general credit, liquidity, market and
interest-rate risks; and
    
    other factors disclosed under Items 1 and 2  Business and Properties  Estimated
Proved Reserves and Future Net Cash Flows, Item 1A  Risk Factors, Item 7 
Managements Discussion and Analysis of Financial Condition and Results of Operations,
Item 7A  Quantitative and Qualitative Disclosures About Market Risk and elsewhere in
this Form 10-K.
  ADDITIONAL INFORMATION ABOUT THE PARTNERSHIP
 Remediation Plans and Procedures
    21




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Environmental Compliance
    22




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ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 APACHE OFFSHORE INVESTMENT PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
 PageNumberReport of Management on Internal Control over Financial Reporting
    
    
    24Report of Independent Registered Public Accounting Firm
    
    
    25Statement of Consolidated Income for each of the three years in the period ended December 31, 2009
    
    
    26Statement of Consolidated Cash Flows for each of the three years in the period ended
December 31, 2010
    
    
    27Consolidated Balance Sheet as of December 31, 2010 and 2009
    
    
    28Statement of Consolidated Changes in Partners Capital for each of the three years in the period
ended December 31, 2010
    
    
    29Notes to Consolidated Financial Statements
    
    
    30Supplemental Oil and Gas Disclosures
    
    
    38Supplemental Quarterly Financial Data
    
    
    40
   23




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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    Internal
Control  Integrated Framework
 G. Steven FarrisChairman and Chief Executive Officer
(principal executive officer)
of Apache Corporation, Managing PartnerThomas P. ChambersExecutive Vice President and Chief Financial Officer
(principal financial officer)
of Apache Corporation, Managing PartnerRebecca A. HoytVice President, Chief Accounting Officer and Controller
(principal accounting officer)
of Apache Corporation, Managing Partner 
 24




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      ERNST & YOUNG LLP 
 25




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 STATEMENT OF CONSOLIDATED INCOME
 For the Year Ended December 31,2010
    
    
    2009
    
    
    2008REVENUES:Oil and gas sales
    
    $
    4,270,245
    
    
    $
    4,310,969
    
    
    $
    7,927,690Interest income
    
    
    77
    
    
    
    229
    
    
    
    46,1934,270,322
    
    
    
    4,311,198
    
    
    
    7,973,883OPERATING EXPENSES:Depreciation, depletion and amortization
    
    
    822,053
    
    
    
    960,632
    
    
    
    901,633Asset retirement obligation accretion
    
    
    118,557
    
    
    
    67,297
    
    
    
    63,489Lease operating expenses
    
    
    1,229,104
    
    
    
    1,445,122
    
    
    
    1,153,688Gathering and transportation costs
    
    
    142,737
    
    
    
    88,064
    
    
    
    69,022Administrative
    
    
    403,000
    
    
    
    418,000
    
    
    
    451,1542,715,451
    
    
    
    2,979,115
    
    
    
    2,638,986NET INCOME
    
    $
    1,554,871
    
    
    $
    1,332,083
    
    
    $
    5,334,897NET INCOME ALLOCATED TO:Managing Partner
    
    $
    466,589
    
    
    $
    446,888
    
    
    $
    1,228,783Investing Partners
    
    
    1,088,282
    
    
    
    885,195
    
    
    
    4,106,114$
    1,554,871
    
    
    $
    1,332,083
    
    
    $
    5,334,897NET INCOME PER INVESTING PARTNER UNIT
    
    $
    1,065
    
    
    $
    867
    
    
    $
    3,976WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,021.5
    
    
    
    1,021.5
    
    
    
    1,032.7
 
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##### Table of Contents



APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 STATEMENT OF CONSOLIDATED CASH FLOWS
 For the Year Ended December 31,2010
    
    
    2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    1,554,871
    
    
    $
    1,332,083
    
    
    $
    5,334,897Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    822,053
    
    
    
    960,632
    
    
    
    901,633Asset retirement obligation accretion
    
    
    118,557
    
    
    
    67,297
    
    
    
    63,489Dismantlement and abandonment cost
    
    
    (180,941
    )
    
    
    (37,720
    )
    
    
    Changes in operating assets and liabilities:(Increase) decrease in accrued receivables
    
    
    81,532
    
    
    
    (13,594
    )
    
    
    31,441Increase (decrease) in accrued operating
expense
    
    
    3,389
    
    
    
    7,799
    
    
    
    (139,712
    )Change in receivable/payable from
Apache Corporation
    
    
    145,885
    
    
    
    (329,519
    )
    
    
    195,645Net cash provided by operating activities
    
    
    2,545,346
    
    
    
    1,986,978
    
    
    
    6,387,393CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (2,590,734
    )
    
    
    (610,279
    )
    
    
    (956,051
    )Increase (decrease) in accrued development cost
and drilling payables
    
    
    1,126,540
    
    
    
    (22,629
    )
    
    
    22,629Net cash used in investing activities
    
    
    (1,464,194
    )
    
    
    (632,908
    )
    
    
    (933,422
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repurchase of Partnership Units
    
    
    
    
    
    
    
    
    
    
    (228,995
    )Distributions to Investing Partners
    
    
    
    
    
    
    
    
    
    
    (5,679,725
    )Distributions to Managing Partner
    
    
    (157,664
    )
    
    
    (437,273
    )
    
    
    (1,195,521
    )Net cash used in financing activities
    
    
    (157,664
    )
    
    
    (437,273
    )
    
    
    (7,104,241
    )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    923,488
    
    
    
    916,797
    
    
    
    (1,650,270
    )CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR
    
    
    2,048,412
    
    
    
    1,131,615
    
    
    
    2,781,885CASH AND CASH EQUIVALENTS, END OF YEAR
    
    $
    2,971,900
    
    
    $
    2,048,412
    
    
    $
    1,131,615
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 CONSOLIDATED BALANCE SHEET
 December 31,2010
    
    
    2009ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,971,900
    
    
    $
    2,048,412Accrued revenues receivable
    
    
    238,431
    
    
    
    319,734Accrued insurance receivable
    
    
    24,449
    
    
    
    24,678Receivable from Apache Corporation
    
    
    
    
    
    
    82,9023,234,780
    
    
    
    2,475,726OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    191,277,205
    
    
    
    188,458,320Less  Accumulated depreciation, depletion and amortization
    
    
    (183,520,231
    )
    
    
    (182,698,178
    )7,756,974
    
    
    
    5,760,142$
    10,991,754
    
    
    $
    8,235,868LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Accrued operating expense
    
    $
    109,794
    
    
    $
    106,405Accrued development cost
    
    
    520,950
    
    
    
    Payable to Apache Corporation
    
    
    668,573
    
    
    
    1,299,317
    
    
    
    106,405ASSET RETIREMENT OBLIGATION
    
    
    2,209,662
    
    
    
    2,043,895COMMITMENTS AND CONTINGENCIES (Note 7)PARTNERS CAPITAL:Managing Partner
    
    
    383,005
    
    
    
    74,080Investing Partners (1,021.5 Units outstanding)
    
    
    7,099,770
    
    
    
    6,011,4887,482,775
    
    
    
    6,085,568$
    10,991,754
    
    
    $
    8,235,868
 
 28




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 STATEMENT OF CONSOLIDATED CHANGES IN PARTNERS CAPITAL
 Managing Partner
    
    
    Investing Partners
    
    
    TotalBALANCE, DECEMBER 31, 2007
    
    $
    31,203
    
    
    $
    6,928,899
    
    
    $
    6,960,102Distributions
    
    
    (1,195,521
    )
    
    
    (5,679,725
    )
    
    
    (6,875,246
    )Repurchase of Partnership Units
    
    
    
    
    
    
    (228,995
    )
    
    
    (228,995
    )Net income
    
    
    1,228,783
    
    
    
    4,106,114
    
    
    
    5,334,897BALANCE, DECEMBER 31, 2008
    
    $
    64,465
    
    
    $
    5,126,293
    
    
    $
    5,190,758Distributions
    
    
    (437,273
    )
    
    
    
    
    
    
    (437,273
    )Net income
    
    
    446,888
    
    
    
    885,195
    
    
    
    1,332,083BALANCE, DECEMBER 31, 2009
    
    $
    74,080
    
    
    $
    6,011,488
    
    
    $
    6,085,568Distributions
    
    
    (157,664
    )
    
    
    
    
    
    
    (157,664
    )Net income
    
    
    466,589
    
    
    
    1,088,282
    
    
    
    1,554,871BALANCE, DECEMBER 31, 2010
    
    $
    383,005
    
    
    $
    7,099,770
    
    
    $
    7,482,775
 
 29




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) ORGANIZATION
 Nature of Operations
      30




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Right of Presentment
    Right of Presentment
    
    Total Valuation
    
    Valuation Price PerValuation Date
    
    Price
    
    UnitDecember 31, 2007
    
    
    15,806,599
    
    
    
    13,225June 30, 2008
    
    
    17,239,136
    
    
    
    13,245December 31, 2008
    
    
    9,701,665
    
    
    
    9,497June 30, 2009
    
    
    8,864,008
    
    
    
    8,677December 31, 2009
    
    
    15,742,174
    
    
    
    15,411June 30, 2010
    
    
    16,477,118
    
    
    
    16,130
 Investing Partner Units Outstanding:
    
    2010
    
    
    2009
    
    
    2008Balance, beginning of year
    
    
    1,021.5
    
    
    
    1,021.5
    
    
    
    1,038.2Repurchase of Partnership Units
    
    
    
    
    
    
    
    
    
    
    (16.7
    )Balance, end of year
    
    
    1,021.5
    
    
    
    1,021.5
    
    
    
    1,021.5
 Capital Contributions
  31




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Statement Presentation
  Use of Estimates
  Cash Equivalents
  Oil and Gas Properties
    32




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    Asset Retirement Obligation
  Revenue Recognition
  Insurance Coverage
  Net Income Per Investing Unit
  33




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Income Taxes
  Receivable from / Payable to Apache Corporation
  Maintenance and Repairs
  Recently Issued Accounting Standards Not Yet Adopted
  (3) COMPENSATION TO APACHE
  Total Reimbursed by the Investing Partnersfor the Year Ended December 31,2010
    
    
    2009
    
    
    2008(In thousands)a.
    
    Apache is reimbursed for general, administrative andoverhead expenses incurred in connection with themanagement and operation of the Partnership's business
    
    $
    322
    
    
    $
    334
    
    
    $
    361b.
    
    Apache is reimbursed for development overhead costsincurred in the Partnership's operations.  These costs arebased on development activities and are capitalized tooil and gas properties
    
    $
    53
    
    
    $
    30
    
    
    $
    26
  34




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (4) OIL AND GAS PROPERTIES
  2010
    
    
    2009
    
    
    2008(In thousands)Oil and Gas PropertiesBalance, beginning of year
    
    $
    188,458
    
    
    $
    186,955
    
    
    $
    185,999Costs incurred during the year:Development Investing Partners
    
    
    2,735
    
    
    
    1,407
    
    
    
    939Managing Partner
    
    
    84
    
    
    
    96
    
    
    
    17Balance, end of year
    
    $
    191,277
    
    
    $
    188,458
    
    
    $
    186,955
  Managing
    
    
    InvestingPartner
    
    
    Partners
    
    
    Total(In thousands)Accumulated Depreciation, Depletion and AmortizationBalance, December 31, 2007
    
    $
    20,897
    
    
    $
    159,939
    
    
    $
    180,836Provision
    
    
    16
    
    
    
    886
    
    
    
    902Balance, December 31, 2008
    
    $
    20,913
    
    
    $
    160,825
    
    
    $
    181,738Provision
    
    
    18
    
    
    
    942
    
    
    
    960Balance, December 31, 2009
    
    $
    20,931
    
    
    $
    161,767
    
    
    $
    182,698Provision
    
    
    21
    
    
    
    801
    
    
    
    822Balance, December 31, 2010
    
    $
    20,952
    
    
    $
    162,568
    
    
    $
    183,520
  (5) MAJOR CUSTOMER AND RELATED PARTIES INFORMATION
     35




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  (6) FINANCIAL INSTRUMENTS
  (7) COMMITMENTS AND CONTINGENCIES
 Litigation 
 Environmental 
 (8) ASSET RETIREMENT OBLIGATION
  2010
    
    
    2009Asset retirement obligation at beginning of period
    
    $
    2,043,895
    
    
    $
    1,121,808Accretion expense
    
    
    118,557
    
    
    
    67,297Liabilities settled
    
    
    (180,941
    )
    
    
    (37,720
    )Revisions in estimated liabilities
    
    
    228,151
    
    
    
    892,510Asset retirement obligation at December 31
    
    $
    2,209,662
    
    
    $
    2,043,895
    36




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (9) TAX-BASIS FINANCIAL INFORMATION
  2010
    
    
    2009
    
    
    2008Net partnership ordinary income (loss) for federal
income tax reporting purposes
    
    $
    (25,363
    )
    
    $
    1,464,728
    
    
    $
    5,184,702Plus: Items of current expense for tax reporting
purposes only Intangible drilling cost
    
    
    2,142,424
    
    
    
    579,318
    
    
    
    851,644Dismantlement and abandonment cost
    
    
    180,941
    
    
    
    37,720
    
    
    
    Tax depreciation
    
    
    197,479
    
    
    
    278,246
    
    
    
    263,6732,520,844
    
    
    
    895,284
    
    
    
    1,115,317Less: full cost DD&A expense
    
    
    (822,053
    )
    
    
    (960,632
    )
    
    
    (901,633
    )Less: asset retirement obligation accretion
    
    
    (118,557
    )
    
    
    (67,297
    )
    
    
    (63,489
    )Net income
    
    $
    1,554,871
    
    
    $
    1,332,083
    
    
    $
    5,334,897
   December 31,2010
    
    
    2009Liabilities for federal income tax purposes
    
    $
    1,299,317
    
    
    $
    106,405Asset retirement liability
    
    
    2,209,662
    
    
    
    2,043,895Liabilities under accounting principles generally
accepted in the United States
    
    $
    3,508,979
    
    
    $
    2,150,300
  37




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APACHE OFFSHORE INVESTMENT PARTNERSHIP

SUPPLEMENTAL OIL AND GAS DISCLOSURES
(UNAUDITED)
 Oil and Gas Reserve Information
    2010
    
    
    2009
    
    
    2008Oil
    
    
    Gas
    
    
    Oil
    
    
    Gas
    
    
    Oil
    
    
    GasProved ReservesBeginning of year
    
    
    555
    
    
    
    2,427
    
    
    
    492
    
    
    
    2,422
    
    
    
    571
    
    
    
    3,004Extensions, discoveries and other additions
    
    
    15
    
    
    
    111
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revisions of previous estimates
    
    
    11
    
    
    
    417
    
    
    
    105
    
    
    
    536
    
    
    
    (42
    )
    
    
    (114
    )Production
    
    
    ( 20
    )
    
    
    ( 601
    )
    
    
    ( 42
    )
    
    
    ( 531
    )
    
    
    ( 37
    )
    
    
    ( 468
    )End of year
    
    
    561
    
    
    
    2,354
    
    
    
    555
    
    
    
    2,427
    
    
    
    492
    
    
    
    2,422Proved DevelopedBeginning of year
    
    
    555
    
    
    
    2,322
    
    
    
    492
    
    
    
    2,317
    
    
    
    571
    
    
    
    2,899End of year
    
    
    561
    
    
    
    2,249
    
    
    
    555
    
    
    
    2,322
    
    
    
    492
    
    
    
    2,317
    38




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
SUPPLEMENTAL OIL AND GAS DISCLOSURES  (Continued)
(UNAUDITED)
 Future Net Cash Flows
   Discounted Future Net Cash Flows Relating to Proved Reserves
 December 31,2010
    
    
    2009
    
    
    2008(In thousands)Future cash inflows
    
    $
    52,801
    
    
    $
    40,838
    
    
    $
    36,059Future production costs
    
    
    (10,290
    )
    
    
    (7,499
    )
    
    
    (7,580
    )Future development costs
    
    
    (5,689
    )
    
    
    (6,026
    )
    
    
    (4,136
    )Net cash flows
    
    
    36,822
    
    
    
    27,313
    
    
    
    24,34310 percent annual discount rate
    
    
    (17,783
    )
    
    
    (12,760
    )
    
    
    (8,312
    )Discounted future net cash flows
    
    $
    19,039
    
    
    $
    14,553
    
    
    $
    16,031
  For the Year Ended December 31,2010
    
    
    2009
    
    
    2008(In thousands)Sales, net of production costs
    
    $
    (2,898
    )
    
    $
    (2,778
    )
    
    $
    (6,705
    )Net change in prices and production costs
    
    
    3,857
    
    
    
    797
    
    
    
    (13,629
    )Revisions of quantities
    
    
    1,923
    
    
    
    4,439
    
    
    
    (1,083
    )Discoveries and improved recoveries, net of cost
    
    
    1,292
    
    
    
    
    
    
    
    Accretion of discount
    
    
    1,455
    
    
    
    1,603
    
    
    
    3,190Changes in future development costs
    
    
    336
    
    
    
    (843
    )
    
    
    285Changes in production rates and other
    
    
    (1,479
    )
    
    
    (4,696
    )
    
    
    2,074$
    4,486
    
    
    $
    (1,478
    )
    
    $
    (15,868
    )
 39




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
SUPPLEMENTAL QUARTERLY FINANCIAL DATA
(UNAUDITED)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Total(In thousands, except per Unit amounts)2010Revenues
    
    $
    1,724
    
    
    $
    1,337
    
    
    $
    596
    
    
    $
    613
    
    
    $
    4,270Expenses
    
    
    787
    
    
    
    653
    
    
    
    558
    
    
    
    717
    
    
    
    2,715Net income (loss)
    
    $
    937
    
    
    $
    684
    
    
    $
    38
    
    
    $
    (104
    )
    
    $
    1,555Net income (loss) allocated to:Managing Partner
    
    $
    253
    
    
    $
    181
    
    
    $
    30
    
    
    $
    3
    
    
    $
    467Investing Partners
    
    
    684
    
    
    
    503
    
    
    
    8
    
    
    
    (107
    )
    
    
    1,088$
    937
    
    
    $
    684
    
    
    $
    38
    
    
    $
    (104
    )
    
    $
    1,555Net income (loss) per Investing
Partner Unit (1)
    
    $
    669
    
    
    $
    493
    
    
    $
    8
    
    
    $
    (105
    )
    
    $
    1,0652009Revenues
    
    $
    1,131
    
    
    $
    759
    
    
    $
    1,074
    
    
    $
    1,347
    
    
    $
    4,311Expenses
    
    
    832
    
    
    
    696
    
    
    
    716
    
    
    
    735
    
    
    
    2,979Net income
    
    $
    299
    
    
    $
    63
    
    
    $
    358
    
    
    $
    612
    
    
    $
    1,332Net income allocated to:Managing Partner
    
    $
    116
    
    
    $
    48
    
    
    $
    111
    
    
    $
    172
    
    
    $
    447Investing Partners
    
    
    183
    
    
    
    15
    
    
    
    247
    
    
    
    440
    
    
    
    885$
    299
    
    
    $
    63
    
    
    $
    358
    
    
    $
    612
    
    
    $
    1,332Net income per Investing
Partner Unit (1)
    
    $
    180
    
    
    $
    15
    
    
    $
    242
    
    
    $
    430
    
    
    $
    867
 
 (1)
    
    The sum of the individual net income per Investing Partner Unit may not agree with
the year-to-date net income per Investing Partner Unit as each quarterly computation is
based on the weighted average number of Investing Partner Units during that period. 40




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Disclosure Control and Procedures
  Report on Internal Control Over Financial Reporting
  Changes in Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
  41




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
  Code of Business Conduct
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  42




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 a.
    
    (1) Financial Statements  See accompanying index to financial statements in Item 8 above.
 (2)
    
    Financial Statement Schedules  See accompanying index to financial statements in Item
8 above.(3)
    
    Exhibits
 3.1
    
    Partnership Agreement of Apache Offshore Investment Partnership
(incorporated by reference to Exhibit (3)(i) to Form 10 filed by Partnership with
the Commission on April 30, 1985, Commission File No. 0-13546).3.2
    
    Amendment No. 1, dated February 11, 1994, to the Partnership Agreement
of Apache Offshore Investment Partnership (incorporated by reference to Exhibit 3.3
to Partnerships Annual Report on Form 10-K for the year ended December 31, 1993,
Commission File No. 0-13546).3.3
    
    Limited Partnership Agreement of Apache Offshore Petroleum Limited
Partnership (incorporated by reference to Exhibit (3)(ii) to Form 10 filed by
Partnership with the Commission on April 30, 1985, Commission File No. 0-13546).10.1
    
    Form of Assignment and Assumption Agreement between Apache Corporation
and Apache Offshore Petroleum Limited Partnership (incorporated by reference to
Exhibit 10.2 to Partnerships Quarterly Report on Form 10-Q for the quarter ended
June 30, 1992, Commission File No. 0-13546).10.2
    
    Joint Venture Agreement, dated as of November 23, 1992, between Apache
Corporation and Apache Offshore Petroleum Limited Partnership (incorporated by
reference to Exhibit 10.6 to Partnerships Annual Report on Form 10-K for the year
ended December 31, 1992, Commission File No. 0-13546).10.3
    
    Matagorda Island 681 Field Purchase and Sale Agreement with Option to
Exchange, dated November 24, 1992, between Apache Corporation, Shell Offshore, Inc.
and SOI Royalties, Inc. (incorporated by reference to Exhibit 10.7 to Partnerships
Annual Report on Form 10-K for the year ended December 31, 1992, Commission File No.
0-13546).*
    
    23.1 Consent of Ryder Scott Company, L.P., Petroleum Consultants.*
    
    31.1 Certification of Principal Executive Officer.*
    
    31.2  Certification of Principal Financial Officer.*
    
    32.1 Certification of Principal Executive Officer and Principal Financial Officer.*
    
    99.1 Report of Ryder Scott Company, L.P., Petroleum Consultants.99.2
    
    Consent statement of the Partnership, dated January 7, 1994 (incorporated
by reference to Exhibit 99.1 to Partnerships Annual Report on Form 10-K for the
year ended December 31, 1993, Commission File No. 0-13546).99.3
    
    Proxy statement to be dated on or about March 31, 2011, relating to the
2011 annual meeting of stockholders of Apache Corporation (incorporated by reference
to the document filed by Apache pursuant to Rule 14A, Commission File No. 1-4300).*
    
    Filed herewith.
 b.
    
    See a (3) above.
 c.
    
    See a (2) above.
 43




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##### Table of Contents



SIGNATURES
  APACHE OFFSHORE INVESTMENT PARTNERSHIPBy:
    Apache Corporation, Managing PartnerDate:      February 28, 2011
    By:
    /s/ G. Steven FarrisG. Steven FarrisChairman of the Board and Chief Executive Officer POWER OF ATTORNEY
   Name
    
    Title
    
    Date/s/ G. Steven Farris

G. Steven Farris
    
    Chairman of the Board and
Chief Executive Officer
(principal executive officer)
    
    February 28,
2011/s/ Thomas P. Chambers

Thomas P. Chambers
    
    Executive Vice President and 
Chief Financial Officer
(principal financial officer)
    
    February 28,
2011/s/ Rebecca A. Hoyt

Rebecca A. Hoyt
    
    Vice President, Chief 
Accounting Officer and Controller
(principal accounting officer)
    
    February 28,
2011




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Name
    
    Title
    
    Date/s/ Frederick M. Bohen

Frederick M. Bohen
    
    Director
    
    February 28, 2011/s/ Randolph M. Ferlic

Randolph M. Ferlic
    
    Director
    
    February 28, 2011/s/ Eugene C. Fiedorek

Eugene C. Fiedorek
    
    Director
    
    February 28, 2011/s/ A. D. Frazier, Jr.

A. D. Frazier, Jr.
    
    Director
    
    February 28, 2011/s/ Patricia Albjerg Graham

Patricia Albjerg Graham
    
    Director
    
    February 28, 2011/s/ Scott D. Josey

Scott D. Josey
    
    Director
    
    February 28, 2011/s/ Chansoo Joung

Chansoo Joung
    
    Director
    
    February 28, 2011/s/ John A. Kocur

John A. Kocur
    
    Director
    
    February 28, 2011/s/ George D. Lawrence

George D. Lawrence
    
    Director
    
    February 28, 2011/s/ F. H. Merelli

F. H. Merelli
    
    Director
    
    February 28, 2011/s/ Rodman D. Patton

Rodman D. Patton
    
    Director
    
    February 28, 2011/s/ Charles J. Pitman

Charles J. Pitman
    
    Director
    
    February 28, 2011